The Republic of Korea (RoK) has been one of the top FDI source countries in Vietnam since 2020, according to the Ministry of Planning and Investment. In the first five months of 2022, the RoK ranked second with an investment capital of over USD 2.06 billion, representing a 12.6% year-on-year increase.
Early in 2022, the Ministry of Finance met with the Korean Embassy and the Korean Chamber of Commerce to discuss administrative and tax regulations. To enhance trade flows, both nations resolved to amend the Double Taxation Agreement.
The majority of Korean deals have been in the manufacturing and processing sectors. Numerous Korean businesses involved in the production of high value-added commodities, such as electronics and high-tech equipment, have made investments in the Northern Key Economic Zone. More traditional industries such as textile manufacturing are typically clustered in the Southern Key Economic Zone.
One notable sector in Vietnam that has been increasingly attractive to investors from the Rok is real estate. The pandemic limited Korean investors as they could not physically visit properties. Nevertheless, with international flights resuming in March 2022, an increase in Korean real estate projects can be expected this year, according to the Senior Manager of Savills Vietnam.
2022 has seen many noteworthy RoK investments, such as YSL Group implementing a 300-hectare industrial project in Nam Binh Xuyen, Vinh Phuc Province, and Lotte E&C investing USD 900 million in the Lotte Eco Smart City Thu Thiem. According to Savills Vietnam, Nam Binh Xuyen Green Park is positioned to be a leading investment destination in Vinh Phuc because of its emphasis on sustainability.
Korean investors also frequently purchase logistics real estate, particularly those seeking to build cold storage or smart warehouses.
Thanks to a stable political environment, strong indications of economic recovery, effective management of the pandemic, and the hospitality of localities in import economic zones, Vietnam continues to be a prime location for investment from foreign countries, including the RoK.